Oil Futures Settle Sharply Lower As Gasoline Stock Rises

Oil prices fell sharply on Wednesday, extending losses to a fifth straight day, after data showing a large increase in gasoline inventories in the U.S. in the week ended December 1st, raised concerns about the outlook for fuel demand.

West Texas Intermediate Crude oil futures for January ended down $2.94 or about 4.1% at $69.38 a barrel.

Brent crude futures were down $2.91 or 3.76% at $74.29 a barrel a little while ago.

According to the data released by the Energy Information Administration (EIA) this morning, gaoline stocks surged 5.4 million barrels last week, more than five times the expected increase.

The EIA data also showed crude inventories dropped by 4.6 million barrels last week, much more than the expected drop of about 1.4 million barrels.

Data from industry group the American Petroleum Institute showed Tuesday that crude oil inventories in the U.S. rose by 594,000 barrels in the week ending December 1, versus expectations for a draw of over 2 million barrels.

Despite the decision of the OPEC+ group to extend their voluntary output cuts of 2.2 million barrels per day till the first quarter of the coming year, oil prices kept sliding this week.

Saudi Arabia and Russian officials stated on Tuesday that the cuts could be extended or even deepened.

Worries about the outlook for fuel demand in China due to the slowdown in the world’s second largest economy continue to weigh on oil prices. Moody’s downgraded its outlook for China’s government credit raging to negative from stable on Tuesday.

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